Are We Required to Register Under the Factory Act with Only 7 Employees?

Dear sir,

We are manufacturers of industrial specialty chemicals, and there are a total of 7 employees in our factory, with 3 employees receiving a salary below Rs. 15,000. Could you please advise if we are required to register under the Factory Act?

Definitions Under the Factories Act

The term "Factory" is defined in Section 2(m) of the Act as follows: "Factory means any premises including the precincts thereof:

(i) Where ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on, or

(ii) Where twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on.

But it does not include a mine subject to the operation of the Indian Mines Act, 1952 (Act XXXV of 1952), or a mobile unit belonging to the armed forces of the Union, a railway running shed, or a hotel, restaurant, or eating place.

Since you have 10 employees/workmen (staff personnel & workmen), you shall register your factory and complete the necessary formalities.

Thanks,

Sagar Gulani

First of all, I would like to tell you about a factory. Then, I think you should consider whether you need to register it or not.

A factory is a premises where 10 or more workers are working on any prescribed day of the year with the use of electricity.

Factories Act Registration Requirements

It is true that, as per the Factories Act, an establishment engaged in any manufacturing activity with the aid of power (not necessarily electric power), wherein 10 or more people are working, is required to be registered under the Factories Act. There is no mention about their salary for coverage, and if we take the salary as the criterion, there would not be any factory in India!

However, as per Section 85 of the Factories Act, the state government can notify that the provisions of the Factories Act shall apply to factories where a lesser number of workers are employed. Accordingly, there are plenty of industries that are covered by the provisions of the Factories Act even though the number of workers is less than 10.

In the case of chemical industries, I doubt if there is any notification that a chemical factory with 3 persons will come under the coverage of the Act. Please refer to the State rules/notification because, in Kerala, an establishment in the paints and chemicals industry should follow the provisions of the Factories Act if the establishment employs 3 persons.

Regards,
Madhu.T.K

Yes, the number of employees matters. If the number of workers is below 10, the unit will not be considered a factory unless it is declared so by the appropriate government under Section 85 of the Factories Act.

Varghese Mathew
0471 2542059